KUALA LUMPUR (April 5): The FBM KLCI is seen drifting lower today with immediate support at 1,806, as broader sentiment at the local market is expected to stay weak today.

Oil edged higher and stocks on Wall Street recouped steep initial losses on Wednesday after China retaliated in a trade spat with the United States, but investors set aside concerns as any impact from a budding tariff war is still unknown, according to Reuters.

The benchmark S&P 500 and Nasdaq composite closed more than 1 percent higher, with the Dow industrials just below that mark as the initial scare of an escalating dispute dissipated, it said.

The Dow Jones Industrial Average rose 230.94 points, or 0.96 percent, to 24,264.3. The S&P 500 gained 30.24 points, or 1.16 percent, to 2,644.69 and the Nasdaq Composite added 100.83 points, or 1.45 percent, to 7,042.11, said Reuters.

AllianceDBS Research in its evening edition Wednesday said that dampened by the down close in the preceding day, the FBM KLCI had on April 4 plunged to the the lowest low of 1,811.56 since Feb 12 before settling near the day’s low at 1,815.94 (down 34.84 points or 1.88%) as market participants continued to play on the selling side in anticipation of a lower market.

“In the broader market, losers outnumbered gainers with 1,105 stocks ending lower and 111 stocks finishing higher. That gave a market breadth of 0.10 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw heavy selling activity on April 4 with the benchmark index breaking the 1,848 support level to reach the lowest low of 1,811.56 since Feb 12.

“The negative opening level indicated that market participants were willing to liquidate their stock positions in attempt to cut their losses short.

“We do see supportive buying attempt to lift the market back up above the 1,848 level was initiated, but the market failed to sustain its position in the area of 1,851 as many market participants were seen not optimistic about the market development in the coming few days.

“Moreover, the downside breakout of 1,848 had also pierced through the 50-day MA line on the downside which triggered a sell-off,” it said.

The research house said following the down close on April 4, there should be selling attempt with immediate support at 1,806.

It said a fall below 1,806 would put pressure on the market to test the subsequent support at 1,795. 

“The analysis of overall market action on April 4 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,811.56 level on April 5,” said AllianceDBS Research.

Based on corporate announcements and newsflow yesterday, stocks that could be in focus today include Lysaght Galvanized Steel Bhd, Seacera Group Bhd, Bertam Alliance Bhd, Datasonic Group Bhd and Hiap Teck Venture Bhd.